Fund Finance

Bridging facilities are being used not just for more efficient deal execution, but also to get proceeds into the hands of LPs more quickly.

TPG’s time cap on fund facilities highlights the heated debate on their use.

The use of subscription facilities by funds has seen its criticism, but the practice is not without its positives write Thomas Smith and Almas Daud.

Officials at the public retirement plan behemoth are set to provide feedback on Monday.

Guidance announced this week on how fund managers should use subscription lines comes at a time when the industry is getting to grips with best practice on this now-controversial issue, Thomas Duffell writes.

Quarterly reports to investors must be explicit on the use of subscription credit lines, while LPs must ask for data that discounts the impact of borrowed cash, the lobby group recommends.

How the use of a subscription credit facility can change the return profile of a fund in good times and in bad.

Demand for subscription credit lines is now being driven by the needs of separate accounts, say Jeff Johnston and Mike Mascia of the Fund Finance Association.

Some investors are in favour of reducing the frequency of capital drawdowns, but many are concerned about the risks of extending loan periods.

Per Olofsson, head of alternative investments at the Swedish pension fund, said subscription credit lines should be used for capital efficiency and not to artificially boost IRRs.